HONG KONG – Many people seem convinced that the productivity gains from AI will solve the problem of unsustainable budget deficits in advanced economies. By showering governments with higher tax revenues, the thinking goes, AI will leave even the most profligate countries with shrinking deficits.
That could be right. But there are many more reasons to think that such expectations are dangerously o...
The narrative posits a technological solution to complex macroeconomic and political problems, appealing to the idea that increased output will automatically translate into fiscal health. This framing attempts to bypass necessary structural political negotiations regarding wealth distribution and taxation. The assumption that productivity gains translate directly into increased tax intake ignores the dynamics of capital concentration and the political power shifts that make taxing capital increa...